Trade and the American Worker: A Primer

 

Services jobs aren't just hamburger flipping:  Critics say NAFTA and the WTO have forced American workers out of high-wage manufacturing jobs and into low-wage service jobs - in essence, pushing them out of factory jobs to become hamburger flippers.  U.S. service industries in 1993-2007 created nearly 19 million new jobs, or nearly six times as many jobs as were lost in manufacturing.  Contrary to popular perception, half of these new service jobs are in high-wage sectors that pay wages similar to or higher than the manufacturing sector.  These high-wage service sectors today employ three times as many workers as U.S. manufacturers.  Wage gains in these service sectors outpaced those in manufacturing in 1993-2007.  (Source: U.S. Bureau of Labor Statistics; see table)

 

Services jobs are often great jobs:  For example, 6.5 million jobs were created in professional and business services, a sector that in 2007 employed 18 million American workers, or nearly 50% more workers than U.S. manufacturing industries.  Average wages in professional and business services are on par with manufacturing.  In addition, U.S. services exports in this period more than doubled, rising from $186 billion to $450 billion.  Nearly all U.S. services exports are from these high-wage sectors.  (Source: U.S. Bureau of Labor Statistics)

 

Trade isn't to blame for low wages in some service sectors:  Nine million new service jobs were created in retail, education, and health care occupations in 1993-2007.  While these sectors traditionally do not pay as well as other service sectors, competition from imports is not an explanation for their relatively low wages because these "non-tradable" sectors are not subject to international competition.  (Source: U.S. Bureau of Labor Statistics)